Philippine Supreme Court Jurisprudence > Year 2010 > July 2010 Decisions > [G.R. No. 156599 : July 26, 2010] BORMAHECO, INCORPORATED, PETITIONER, VS. MALAYAN INSURANCE COMPANY, INCORPORATED AND INTERWORLD BROKERAGE CORPORATION, RESPONDENTS. :

This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing 1] the August 22, 2002 Decision^[1] of the Court of Appeals (CA), in CA-G.R. CV NO. 47469, which affirmed the decision of the Regional Trial Court of Manila, Branch 17 (RTC); and 2] its December 5, 2002 Resolution which denied the motion for reconsideration of the petitioners.

On December 13, 1985, Marcel Kopfli Company of Lucerne, Switzerland shipped the following cargo to the Manila Peninsula Hotel (the Hotel): (a) one unit Kolb modular construction bakery oven; (b) one steam extraction hood; (c) one lateral proofer; (d) one proofing cabinet; (e) one trolley for setters; (f) eight setters; and (g) spare parts for the Kolb bakery oven.  The cargo was packed in one crate and loaded on board the vessel MS Nedlloyd Dejima which left the port of Fos, Switzerland on said date. The cargo was insured by the Hotel with the private respondent Malayan Insurance Company (Malayan).

On January 6, 1986, MS Nedlloyd Dejima arrived at the port in Manila. The subject cargo was unloaded at Pier 13 of the South Harbor in good order and condition.  On February 3, 1986, pursuant to its contract with the Hotel, the other private respondent Interworld Brokerage Corporation (Interworld) withdrew the cargo from the pier and delivered it to the Hotel's warehouse. For this undertaking, Interworld secured the services of petitioner Border Machinery & Heavy Equipment Co., Incorporated (Bormaheco) to provide a forklift truck and a qualified operator for the purpose of unloading the cargo from the delivery truck.^[2]

At the premises of the warehouse, Bormaheco's forklift operator, Custodio Trinidad, proceeded to unload the cargo from the delivery truck. He placed the fork under the crate and immediately lifted it.  The cargo fell from the fork at a height of six feet and broke open.^[3]  As a result, the Kolb construction bakery oven, the lateral proofer and the proofing cabinet sustained "extensive damage" and were declared as a "total loss."^[4]

For the loss, the Hotel sought indemnity from Malayan under its insurance policy.  Malayan paid the Hotel the sum of P690,849.68 plus the additional amount of P75,151.33 representing the pro-rata share of the freight charges on the damaged items.  In turn, Malayan, which was subrogated to the rights of the Hotel, made formal demands for reimbursement from Interworld but to no avail.

On August 7, 1986, Malayan filed a complaint against Interworld before the RTC of Manila, docketed as Civil Case No. 86-37017 and raffled to Branch 17 thereof. Interworld, on the other hand, filed a Third-Party Complaint against Bormaheco for indemnity or other relief for the damages of the cargo.  After trial, the RTC resolved the conflict in favor of the private respondents as it found that the forklift operator lifted the cargo when it was not yet properly balanced causing it to tilt, fall and sustain damages.  The fallo of the subject decision^[5] reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiff Malayan Insurance Company, Inc. and against defendant and third-party plaintiff Interworld Brokerage Corporation, ordering the latter to pay the former the sum of P756,000.71 with legal interest thereon at the rate of six percent (6%) per annum from August 7, 1986 until the said sum is fully paid, and the further sum of P40,000.00 as attorney's fees.

Third-party defendant Bormaheco, Inc. is ordered to pay the defendant and third-party plaintiff whatever sums the latter will pay to the plaintiff by virtue of this judgment.

Costs are assessed against the defendant and third-party plaintiff in favor of the plaintiff, and against the third-party defendant in favor of the defendant and third-party plaintiff.

The counterclaim of the defendant against the plaintiff as well as the counterclaim of the third-party defendant against the third-party plaintiff are dismissed.

SO ORDERED.

Aggrieved, Interworld and Bormaheco separately filed their respective appeals before the Court of Appeals. After a review of the records, the appellate court affirmed the RTC's finding with regard to the damages sustained by the cargo items.^[6]  The CA gave probative weight to the Final Report of the appraisal company, Adjustment Standards Company.  Interworld and Bormaheco failed to convince the CA that the damage was caused by the faulty packing of the cargo rather than by the forklift operator. According to the appellate court,

x x x. Verily, if the cargo was improperly packed, as appellants would have Us believe, then the accident should have happened while it was in transit.  There were a lot of instances when the stacked oven could have caved-in while it was being handled during its voyage yet as the records show, the transport of the cargo went well without incident until that fateful day.  There is but one explanation for all these - the cargo was properly handled during transit and corollarily, the trial court was correct in holding the forklift operator responsible for the mishap.

Appellants nevertheless suggest that faulty packing caused the stacked oven to suddenly slip - forcing the crate to tilt to the left as the forklift was lowering it.  Such theory is specious. If the crate was properly balanced on the forklift as the operator claims, then there is no reason why the cargo would slip and tilt on its own force seeing as it was stacked horizontally.  Appellants' scenario could only be possible if the crate was not properly balanced on the forklift and the heavier weight is concentrated on one flank, in this case the left side.  Settled is the rule that evidence to be believed must not only proceed from the mouth of a credible witness, but it must be credible in itself - such as common experience and observation of mankind can prove as probable under the circumstances.  Common experience and observation leads Us to believe that the forklift operator miscalculated the position where he placed the forklift under the crate.  This caused the imbalance and eventually induced the crate to tilt and fall towards the left side of the forklift. Hence, Our inclination to believe appellee's explanation that the mishap was brought about by the forklift operator's negligence in suddenly lifting the crate even while it was not yet properly balanced on the fork and thereby causing the entire crate to fall on the ground.  This is more in consonance with human observation and experience.^[7] (citations omitted)

The CA thus ruled that Interworld was liable under its contract of carriage with the Hotel, wherein the former undertook to transport the subject cargo from the pier to the latter's premises.  Since the cargo was damaged when it was being delivered, Interworld is liable therefor pursuant to its contractual undertaking.  The appellate court also affirmed the trial court's finding with regard to Bormaheco's liability to Interworld.

On the other hand, Bormaheco is responsible for the work done by persons whom it employs in its performance.  Neither can Bormaheco be absolved from liability because it exercised due diligence in the selection of the employee whose negligent act caused the damage in question.  The reason is that the obligation of Bormaheco was created by contract, and Article 2180 is not applicable to negligence arising in the course of the performance of a contractual obligation.  Article 2180 is exclusively concerned with cases where negligence arises in the absence of agreement.^[8] (citations omitted)

Finally, resolving the issue on whether or not the incident was outside or beyond the thirty (30) day period of coverage of the insurance policy, the CA noted that the incident occurred on February 3, 1986 which was well within the said 30-day period reckoned from January 6, 1986, the date of the unloading. According to the CA, the date February 13, 1986 mentioned in Malayan's initial complaint was nothing but a typographical error which was subsequently corrected and rectified.^[9]

Not in conformity, Bormaheco filed this petition for review on certiorari. Malayan submitted its comment, but Interworld did not, despite several court orders. On June 13, 2007, the National Bureau of Investigation's (NBI) reported that it failed to locate Interworld's general manager despite efforts to serve this Court's Order of Arrest and Commitment against its president.  The Court eventually resolved to dispense with Interworld's comment.^[10]  After Bormaheco filed its Reply, the Court gave due course to the petition and required the parties to submit their respective memoranda.

To amplify its prayer for the reversal of the subject decision, in its memorandum, Bormaheco presents the following:

ISSUES

WHETHER OR NOT THE COURT OF APPEALS COMMITTED AN ERROR OF LAW WHEN IT AFFIRMED IN TOTO THE DECISION OF BRANCH 17, REGIONAL TRIAL COURT OF MANILA

WHETHER OR NOT THE CLAIM OF THE RESPONDENT MALAYAN IS STILL ENFORCEABLE AGAINST PETITIONER AND RESPONDENT INTERWORLD

WHETHER OR NOT THE PETITIONER SHOULD BE HELD LIABLE FOR THE NEGLIGENCE OF RESPONDENT INTERWORLD FOR THE IMPROPER PACKING OF THE GOODS

WHETHER OR NOT IT WAS RESPONDENT INTERWORLD WHO EXERCISED SUPERVISION OVER THE FORKLIFT OPERATOR.^[11]

The petition is devoid of merit.

Primarily, petitioner Bormaheco zeroes in on the fact that the Complaint indicated that the incident happened on February 13, 1986, and was, therefore, filed beyond the 30-day coverage of the insurance policy reckoned from the date of discharge of the shipment from the vessel, on January 6, 1986.  For said reason, petitioner claims that the policy already expired. It then argues that Malayan's amendment as to the date should not have been permitted because it was a substantial amendment and was filed three (3) years after a responsive pleading had been submitted.

The Court is not persuaded.

At present, Section 4, Rule 10 of the Revised Rules of Court is quite clear with regard to formal amendments:

SEC. 4. Formal amendments. - A defect in the designation of the parties and other clearly clerical or typographical errors may be summarily corrected by the court at any stage of the action, at its initiative or on motion, provided no prejudice is caused thereby to the adverse party.

Although the Rule prior to its revision did not specifically include the phrase "other clearly clerical or typographical errors," a similar intention may be gleaned from the judicial pronouncements then.

In an earlier case, the Court decreed that amendments of pleadings may be resorted to subject to the condition that "the amendments sought do not alter the cause of action of the original complaint."^[12]  More aptly, in another case, the Court pronounced that amendment of pleadings may be resorted to, so long as the intended amendments are not inconsistent with the allegations in the initial complaint, and are obviously intended to clarify the intrinsic ambiguity in it with respect to the time of accrual of the cause of action.^[13] In Juasing Hardware v. Mendoza^[14] where the old provision was applied, this Court reiterated its previous pronouncement in Shaffer v. Palma.^[15] Thus:

The courts should be liberal in allowing amendments to pleadings to avoid multiplicity of suits and in order that the real controversies between the parties are presented and the case decided on the merits without unnecessary delay.  This rule applies with more reason and with greater force when, as in the case at bar, the amendment sought to be made refers to a mere matter of form and no substantial rights are prejudiced.^[16]

Indeed, the rule on amendment of pleadings need not be applied rigidly, particularly where no surprise or prejudice is caused the objecting party.^[17]

In the case at bench, while the date indicated in the original complaint was February 13, 1986, there is no denying that the actual date of the incident was really February 3, 1986 when the subject cargo was actually withdrawn from the pier and delivered to the Hotel's warehouse.  All the supporting documents offered in evidence refer to this date and no other. Contrary to Bormaheco's stand, the actual date of the loss was well within the coverage of the insurance policy.  Surely, Bormaheco could not have been misled or surprised by the correction of the error.  Neither could it have been prejudiced by the correction of the said date for this was merely a typographical mistake - purely technical.  Going back to Juasing, this Court quoting from a much earlier case opined,

The error in this case is purely technical.  To take advantage of it for other purposes than to cure it, does not appeal to a fair sense of justice.  Its presentation as fatal to the plaintiff's case smacks of skill rather than right.  A litigation is not a game of technicalities in which one, more deeply schooled and skilled in the subtle art of movement and position, entraps and destroys the other.  It is, rather, a contest in which each contending party fully and fairly lays before the court the facts in issue and then, brushing aside as wholly trivial and indecisive all imperfections of form and technicalities of procedure, asks that justice be done upon the merits. x x x x^[18]

As to the delayed correction of the typographical error, no substantial prejudice was caused to the petitioner either.  In one case, it was ruled that "a correction xxxx could be summarily made at any stage of the action provided no prejudice is caused thereby to the adverse party, as Section 4 of the same Rule 10 further provides."^[19]

Next, Bormaheco questions the factual findings of both the trial court and the appellate court, more particularly the extent of the damage caused to the cargo.  Bormaheco also challenges the findings that its forklift operator, Custodio Trinidad, was at fault or negligent, and insists that the damage to, or loss of, the cargo was due to the improper crating.  Bormaheco may have forgotten that the Court is not a trier of facts and that, in this petition for review on certiorari, will not admit questions other than questions of law.^[20]

The antecedents mentioned earlier in this disposition readily show the congruence in the factual findings of the trial court and the appellate court. Thus, and in the absence of any exceptional circumstances^[21] to warrant the contrary, this Court must abide by the prevailing rule that findings of fact of the trial court, more so when affirmed by the Court of Appeals, are binding and conclusive upon It.^[22]  Accordingly, the trial court and the appellate court's findings that the subject "oven, proofing cabinet and lateral proofer were badly dented and deformed and that their glass parts were broken to pieces," and that the oven was also rendered inoperable, stand.  The findings of the two courts below, with regard to the fault of Bormaheco's forklift operator, also hold.

Hence, the Court agrees with the RTC and the CA that Interworld is liable under its contract with the Hotel for the loss of the cargo due to the negligence of those employed by it -  Bormaheco and its forklift operator. The relationship between Interworld and the Hotel, in whose place Malayan was subrogated, was contractual arising from the former's commitment to transport the subject cargo to the latter's warehouse.  With its failure to comply with this obligation due to the negligence of the forklift operator of Bormaheco whom it contracted to unload the subject cargo and pursuant to Articles 1172 and 1173 of the New Civil Code,^[23] Interworld necessarily becomes liable.  In turn, Bormaheco is liable to Interworld for the acts of its forklift operator whom the trial court and the appellate court found to have been grossly negligent.^[24]

WHEREFORE, the August 22, 2002 Decision of the Court of Appeals in CA-G.R. CV NO. 47469 and its December 5, 2002 Resolution are hereby AFFIRMED.

SO ORDERED.

Carpio, (Chairperson), Nachura, Peralta,  and Abad, JJ., concur.     

Endnotes:

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^[1] Rollo, pp. 87-96.  Penned by Justice Conrado M. Vasquez, Jr. and concurred in by Justice Andres B. Reyes, Jr. and Justice Mario L. Guariña III.

^[2] Id. at 88.

^[3] Id. at 89.

^[4] Id., Exhibit "I-2" to "I-3," at 227-228.

^[5] Id. at 144-149.

^[6] Id. at 92-93.

^[7] Id. at 93-94.

^[8]  Id. at 95.

^[9]  Id. at 96.

^[10] Id., SC Resolution dated June 13, 2007, at 310.

^[11] Id. at 394.

^[12] Alger Electric, Inc. v. Court of Appeals,  219 Phil. 548 (1985).

^[13] Guirao v. Ver, 123 Phil. 466 (1966).

^[14] 201 Phil. 369 (1982).

^[15] 131 Phil. 22 (1968).

^[16] Supra note 14 at 375.

^[17] Northern Cement Corporation v. Intermediate Appellate Court, 242 Phil. 141 (1988).

^[18] Supra note 14 at 374.

^[19] La Tondena Distillers, Inc. v. Court of Appeals, G.R. No. 88938, June 8, 1992, 209 SCRA 553; cited in I Herrera, Remedial Law, p. 596 (2000).

^[20] Tayao v. Mendoza, 495 Phil. 655 (2005).

^[21] (1) When the conclusion is a finding grounded entirely on speculations, surmises or conjectures;     (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee; (7) when the findings of the Court of Appeals are contrary to those of the trial court; (8) when the findings of fact are conclusions without citation of specific evidence on which they are based; (9) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion; and (10) when the findings of fact of the Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on record (Id., earlier citations omitted).

^[22] Child Learning Center, Inc. v. Tagorio, G.R. No. 150920, November 25, 2005, 476 SCRA 236, 241; Langkaan Realty Development, Inc. v. United Coconut Planters Bank, 400 Phil. 1349 (2000); Abapo v. Court of Appeals, 383 Phil. 933 (2000); Philippine National Construction Corporation v. Mars Construction Enterprises, Inc., 382 Phil. 510 (2000).

^[23] Art. 1172. Responsibility arising from negligence in the performance of every kind of obligation is also demandable, but such liability may be regulated by the courts, according to the circumstances.

ART. 1173. The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2, shall apply.

If the law or contract does not state the diligence which is to be observed in the performance, that which is expected of a good father of a family shall be required.

^[24] Art. 1727.  The contractor is responsible for the work done by persons employed by him.